# Future Value Function in Excel

Posted on:  02/10/2020

The Future Value function in Excel, or the FV function, will give you the future value on an investment. It is one of the financial function in Excel.

## Future Value Function - arguments

The Future Value function has five arguments. Three of the five are required. Two arguments are optional.

=FV (rate, nper, pmt, [pv], [type])

• rate - The interest rate per period. If 12 months, divide the interest rate by 12.
• nper - The total number of payment periods. If 12 months, multiply the periods by 12.
• pmt - The payment made each period. Must be entered as a negative number.
• pv - [optional] The present value of future payments. If omitted, assumed to be zero. Must be entered as a negative number.
• type - [optional] When payments are due. 0 = end of period, 1 = beginning of period. The default is 0.

## Example 1 of the Future Value: one-time investment

\$10,000 invested at 7% interest for 10 years will be \$19,672 in 10 years. Notice  in this example, there are no peroidic payments. You invested the 10,000, and that is it.

## Example 2 of the Future Value: one-time investment and periodic monthly investment

Similar to example 1, but now you are going to make the initial investment of \$10,000, and you make regular investments of \$400 every month at the end of the month. The interest rate is still 7%. Notice cell B5 is now 12 instead of the number 1. It is 12 since there are 12 months in a year, and you are investing \$400 every month.

##### Chris Menard

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